This article is relevant to anybody who wants to further their career in the financial services industry.
The paraplanning industry is rapidly growing and is an extremely important element in financial services. But what exactly does a paraplanner do? Are they just aspiring advisers? How can they help the business and the IFA? This article will look at some of these questions and the role of a paraplanner from both the IFA perspective and for those wishing to progress into this role.
A paraplanner is...
Despite the growth in the paraplanning industry, a large number of IFA firms still do not understand the benefits a good quality paraplanner can bring to their firm and therefore do not have access to one. Others confuse their sales support with paraplanners.
The role of a paraplanner and how it differs from that of the adviser and sales support was researched during the NMG survey in May of this year and was summed up as:
| ADVISER |
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Business development
Client relationship management
Advice
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| PARAPLANNER |
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Product & fund research
Analysis
Report writing
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| SUPPORT |
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New business processing
General administration
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This clearly demonstrates how a paraplanner can fit into a business, and improve the structure of it. Particularly in smaller firms, advisers will spend too much time on the paraplanner roles detailed above, undertaking analysis and writing reports. They are tasks which require a higher level of knowledge and experience than sales support staff typically have which prevents the IFA from delegating. However, when compared to the roles of business development, client relationship management and advice giving, it is quite clear where an advisers’ time should be spent if they want their business to be successful.
The benefits
Hence the role of a paraplanner. A person, either within the firm or externally, to whom the adviser feels confident in delegating the important research and report writing duties, who has qualifications and experience which are not too dissimilar to that of an IFA and who can ultimately free up a large amount of the advisers time to focus on the business.
Other, less frequently stated, benefits of a paraplanner include:
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having someone to help answer support staff queries and provide them with ongoing training and development
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having someone who is committed to ongoing exams and professional development, who can prove a source of support for IFAs, particularly those who may not have taken exams in a while
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a person who can keep up to date with industry changes and provider offerings, meeting with provider broker consultants and attending seminars, freeing up even more of the advisers time
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having a sounding board for the adviser to discuss ideas with and obtain other perspectives from
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having someone who can undertake complex, one-off areas of research; for example, an adviser may come across a case they do not deal with very often and which could take a lot of valuable time refreshing their skills in that area and researching the necessary components
A paraplanner can be an advisers’ eyes and ears when they are busy with business development and client interaction.
A career in its own right
There used to be a misconception that a paraplanner role was no more than a stepping stone to becoming an IFA; almost like a trainee adviser. While becoming a paraplanner is certainly a great way to progress naturally from sales support to advising, it is also a career in its own right. Many find that they want to advance from sales support, assume paraplanning will be the step up and then discover that it is actually what they really enjoy and no longer wish to move onto advising; I am a case in point!
IFA concerns
The typical responses from advisers who have not yet embraced this role within their company are:
“I can’t afford a paraplanner” -
“I have managed without one until now, why would I need to use one now”
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"They are a glorified typing service which I could get my support staff to do at a cheaper cost”
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“I don’t have time to train and supervise a paraplanner”
Of course for the lone IFA, who has always worked on their own and sees anything extra as an expense, taking on a paraplanner can seem a huge and costly step. However, for those advisers who wish to continue advising, successfully, post RDR, remaining on their own may no longer be an option.
The costs associated with a good quality paraplanner should be more than offset by the extra time the adviser gets to spend with their clients and developing their business – not to mention cutting back on some of the evening and weekend work that many are still doing as they try to keep on top of the ever increasing rules and regulations which need to be met. A decent paraplanner will have several years experience and so supervision will be much lower than that required for someone new to the industry or support staff who are only just learning. And any firm which takes on a paraplanner to act as a ‘glorified typing service’ has completely got the wrong end of the paraplanning stick!
For those who understand the benefits of a paraplanner, but still cannot justify the initial costs and training, not to mention the ongoing costs in terms of studying support, holidays, sick leave and so on, a freelance paraplanner can be the perfect solution. They offer the adviser all of the support available from a paraplanner, but on an ad hoc basis when the adviser feels they have a need for it. This method can prove the ideal stepping stone for those who are making their first forays into using a paraplanner, as well as a way of bridging the gap for firms who use paraplanners already but occasionally have an overflow of work which does not warrant the permanent recruitment of a new member of staff.
The financial services industry is constantly evolving, no more so than now when everything is being reviewed, right down to the very foundations of charging and remuneration. Having high quality support can take a huge burden off the advisers shoulders, leaving them able to focus on their clients and the business needs, and ensuring that they are able to face the upcoming challenges head on and well prepared. A paraplanner can therefore be worth their weight in gold.
This article was written by Cathi Harrison of Para-Sols. Para-Sols offers paraplanning solutions and support to financial advisers across the whole of the UK. For more information, please see www.para-sols.co.uk or call 01325 381375.
All copyright, Para-Sols.
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